House Members Plan to Draft New Online Privacy Bill

House Members plan to draft new legislation regarding online privacy this year. The House Subcommittee on Communications, Technology, and the Internet met yesterday afternoon to address concerns regarding privacy implications of ISP-based and other behavioral ad targeting technologies. The Subcommittee invited members of privacy and Internet freedom advocacy groups, in addition to representatives of telecoms, to its “Communications Networks and Consumer Privacy: Recent Developments” hearing.

“The thought that a network operator could track a user’s every move on the Internet, record the details of every search and read every e-mail or attached document is alarming,” said Subcommittee Chairman Rep. Rick Boucher during his opening statement.

Subcommittee members indicated their willingness to propose legislation relating to behavioral advertising, or perhaps all targeted online advertising. Ranking Republican Cliff Stearns of Florida asked witnesses if legislation he introduced in 2002 could serve as a guide for a future bill. His Consumer Privacy Protection Act was never passed, but would have required data collectors to notify consumers about data collection and usage.

That bill, co-sponsored by Boucher and other House Members, “will be the starting point and the foundation for our privacy bill this year,” said Boucher. He said he expects the bill to require any service collecting data to disclose what will be collected and how it will be used, in addition to enabling consumers to act on that notification.

However, Stearns did imply that any attempts to regulate online privacy should consider the effect on business. “Overreaching privacy regulation…could have a significant negative economic impact at a time when many businesses in our economy are struggling,” he said. Stearns also said Congress should consider search engines and ad networks in addition to exploring regulation regarding behavioral targeting technologies.

Industry representatives from AT&T, National Cable and Telecommunications Association, and mobile social platform Loopt suggested Congress does not necessarily need to craft new legislation protecting consumer privacy, and that business should be at the table if and when such a law is written.

Others expressed worries that current business practices may not suffice when it comes to protecting consumer privacy. Center for Democracy and Technology President and CEO Leslie Harris noted “Just because ISPs or advertising networks may use only a small portion of what is captured and do not retain other information does not diminish the breadth and intrusiveness of the initial data capture.”

Both the Senate and House have inspected ISP-based and other forms of behavioral advertising. In July 2008, the Senate held a hearing on the “Privacy Implications of Online Advertising.” A month later the House Energy and Commerce Subcommittee asked ISPs and online media firms to describe their online tracking and ad targeting activities.

Industry observers and consumers can expect further analysis by Congress. According to Boucher, a joint hearing will be held on related subject matter this summer.